'Unique' Mortgage Situation

heather89

Hello,

I have a query regarding buying a property.

I own a house (paying off a residential mortgage). A friend and myself wish to buy together in London. She doesn't own any property and would like to live in this herself whilst we rent out the spare room. I would continue to live in my current property. We cannot afford to buy in London separately but want to take a step onto this property ladder.

From what I've heard so far this might be difficult mortgage wise as it doesn't really fit into either a residential mortgage or buy to let.

Please could someone advice as to what our best steps would be?

Many thanks
Heather

ACG

Its a residential as your friend will be living in the property and on the mortgage.

However...
In order for you to be able to afford the new mortgage, you would need to be earning enough to pay for your existing mortgage and the new one - im assuming that probably wont be the case.

Lodger income wont be taken into account. There are also a few other issues here but i think you may struggle with this.

kingstreet

Bigger deposit required as it's a second property for one applicant.

heather89

Thanks for the information.

So is lodger income not relevant at all then? I have a lodger in my current house and that covers the price of my mortgage as I had a large deposit.

ACG

Do you declare income and pay tax on it?

kingstreet

If you were remortgaging your current home and could evidence lodger income for a year or two, I think you could probably get it taken into account.

On a joint purchase in a different part of the world, I'd guess your chances at slim and none.